Canadian Manufacturing Barometer

Business outlook Q3 2012

November 2012

Overall, 40 percent of Canadian-based industrial manufacturing executives are optimistic about the prospects for the Canadian economy over the next 12 months, off from 54 percent last quarter. Fifty percent believe that the Canadian economy grew in third-quarter, 2012. The Canadian sample forecasts single digit revenue growth for their own companies over the next 12 months, 4.0 percent, below the prior quarter forecast (4.4 percent) but slightly above the calendar year 2012 pace of 3.8 percent.

Optimism about prospects for the world economy among those selling abroad remained low at 11 percent level, but pessimism rose to 40 percent. Yet, some positive change was reported in international sales in third-quarter, 2012. The contribution of international to total revenues is expected to be 67 percent– 46 percent from the US and 21 percent from other international markets- up from the prior quarter’s forecast.

The chief barriers to growth over the next 12 months is concern about demand, up 13 points to 55 percent. A high number (50 percent) are planning major new investments of capital over the next 12 months, and 78 percent are planning increased operational spending, focused on new products or service introductions, research & development and information technology. Many more are planning new hiring (48 percent). Finally, gross margins remained moderately positive in the third-quarter, 2012, with higher costs offset by price increases.